“We have always known that heedless self-interest was bad morals; we know now that it is bad economics.”

Archive for June, 2012

A colleague points out a couple interesting features of the miracle jobs figures (raw data here; summary Google Docs spreadsheet here) for the Quarterly Census on Employment and Wages that the Walker administration is touting.

First, somehow or other, even though the new data show that private sector employment increased in 4Q 2011 over 4Q 2010 (+1.4%, itself nothing to write home about), the corresponding wage bill (even before adjusting for inflation) was down (-0.5%), hence the average private sector wage in Q4 2011 fell 1.8 percent year-over-year. The comparison to the previous year’s quarter may not address all seasonality issues with the data, so it’s possible there’s an explanation in calendar issues or something else that would work itself out in a proper seasonal adjustment process.[1] However, falling private sector wage payments usually occur only in periods of falling employment. Indeed, the previous episode of declining wages in Wisconsin was in the depths of the recession when private sector employment was falling at a rate of 5-6 percent year-over-year; the private sector wage bill had shown year-over-year increases from Q2 2010 through Q3 2011.

Second, even though jobs that can’t be located in a particular county are only 1.8% of total employment in Wisconsin, they account for 42 percent of the claimed employment increase. The average weekly wage for the jobs of undisclosed location also showed an especially large decline.

Regardless of the outcome of the election, the real QCEW data release later in the month should be interesting. The bottom line is, as Menzie Chinn observed at Econbrowser, that Wisconsin employment growth in the early Walker era has by any account lagged both the U.S. as a whole and the pace implied by Walker’s 250,000 job promise.

[1] There were much smaller year-over-year declines in the wage bill and the average weekly wage from Q4 2004 to Q4 2005.